Low Doc with Accountants Letter
Low doc loans with accountant’s letter began to be an accepted policy by some lenders after the GFC in 2008. After the GFC, many of the loans that became delinquent were low doc loans and lenders began adopting more prudent lending practices after this period.
The advent of the NCCP (National Consumer Protect Act) in January 2011 also put lending practices under close scrutiny with the advent of Responsible Lending Guidelines. Hence, the GFC and the NCCP helped herald the beginning of more information to support a low doc declaration using an accountant’s letter.
Lenders who offer low doc loans with accountant’s letter?
There are several lenders who offer low doc loans with an accountant’s letter in Australia in 2012. There are a number of banks and a few non bank lenders who provide these types of low doc loans. The lending policy between these lenders differ so it’s best to consult with your Mortgage Providers broker who will find the best loan that meets your needs..
Maximum LVR using an accountant’s letter low doc loan?
The maximum LVR that lenders will generally lend on an accountant’s letter low doc loan is 80% LVR. However, there is one lender who will lend up to 85% LVR up to a certain loan amount.
Are accountant’s letter low doc loans more expensive?
Accountant’s letter low doc loans are generally priced the same as other low doc loans. However, there are a small number of the lenders who will price these types of low doc loans approximately 0.5% higher than normal low doc loans.
ABN for an accountants letter low doc loan?
An ABN (Australian Business Number) is required to be eligible for an accountant’s letter low doc loan by any borrower. Further, you will not be required to be registered for GST as long as your income declaration is under $75,000.
At the time of application, your ABN must be at least 6 months old to be eligible for an accountant’s letter low doc loan.
Do low doc loans with accountant’s letter require more information?
Low doc accountant’s letter lenders ask ONLY for a low doc declaration of affordability by the borrower and the supporting accountant’s letter to verify affordability.
Lenders mortgage insurance for low doc accountant’s letter loan?
With most low doc loan accountant’s letter lenders, lenders mortgage insurance is payable when you borrow over 60%LVR. However, there are 3 lenders who will lend up to 70% LVR with no mortgage insurance. In addition there is 1 lender who will lend to 80% LVR with No LMI. This could attract a slightly higher interest rate.
Bad Credit, can I obtain a low doc loan with an accountant’s letter?
Low doc loans with accountant’s letter can be obtained for borrowers with bad credit with a small number of lenders. As these lenders are more bad credit lenders, this type of loan will attract a slightly higher interest rate.
What does a low doc accountant’s letter need to say?
The accountant’s letter low doc loan declaration is a template provided by the lender in addition to its normal low doc loan declaration. This template is attached to the original low doc loan declaration so the accountant can input his details and fill in the necessary blanks.
The main content of an accountant’s letter low doc declaration confirms the accountant’s details and registration details. In addition, the accountant confirms they are aware that the borrower has made an income declaration, and that this income declared is ‘not an unreasonable estimate of the borrower’s income.’
The accountant does not necessarily have to say what the borrower’s income is, rather just confirm that the income stated by the borrower is ‘not unreasonable’. Many practicing accountants will be familiar with the new declarations since they began in 2011.
What names can I borrow using a low doc loan with accountant’s letter?
There are several different borrowing entity types using a low doc loan with accountant’s letter. These can be any of the following:
- Personal name
- Partnership name
- Business name>
- Company name
- Trust name
At Mortgage Providers, we are known as the low doc loan specialists who know which lenders offer what types of low doc loans. We know which lenders offer the cheapest interest rates with the most flexible lending policy suiting any requirement.